The Hobby Lobby Decision Could Affect a Majority of U.S. Workers

The U.S. Supreme Court today ruled that the government cannot force “closely held” corporations to offer insurance coverage that provides birth control to employees, a stipulation of the Affordable Care Act passed by Congress in 2010.

Closely held corporations — firms in which 50% of stock is owned by five or fewer people — are by definition closely linked to a few core owners, whose rights the Court sought to protect. As the majority wrote:

“The purpose of extending rights to corporations is to protect the rights of people associated with the corporation, including shareholders, officers, and employees. Protecting the free-exercise rights of closely held corporations thus protects the religious liberty of the humans who own and control them.”

But while the ruling may seem limited in that it only speaks to closely held firms, it in fact applies to more than 90% of U.S. companies, and even to a narrow majority of workers.

The effect that the ruling will have is unclear, though the Wall Street Journal has already reported on some businesses that plan to stop providing contraceptives as a result of the ruling.

Such a trend could help reverse the steady increase in contraceptive coverage, which has risen from 68% to 84% since the passage of the ACA.

The backdrop for firms’ benefit decisions are the “two opposing forces” of “strong demand for employee benefits by jobseekers and existing employees alike, and the ongoing rise in the cost of benefits, particularly health insurance” according to a recent survey by the Society for Human Resource Management.

For most closely held firms, religious exemptions will take a back seat to this balancing act, between costs and talent. According to a recent Journal of the American Medical Association poll, 69% of Americans support the Affordable Care Act’s policy of mandated contraception coverage, and only 7.8% supported all benefits except contraception — the Hobby Lobby position.